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Minnesota Film and TV Board OFFICE OF THE LEGISLATIVE AUDITOR O L A STATE OF MINNESOTA EVALUATION REPORT Minnesota Film and TV Board APRIL 2015 PROGRAM EVALUATION DIVISION Centennial Building – Suite 140 658 Cedar Street – St. Paul, MN 55155 Telephone: 651-296-4708 ● Fax: 651-296-4712 E-mail: [email protected] ● Website: www.auditor.leg.state.mn.us Through Minnesota Relay: 1-800-627-3529 or 7-1-1 Program Evaluation Division Evaluation Staff The Program Evaluation Division was created James Nobles, Legislative Auditor within the Office of the Legislative Auditor (OLA) in 1975. The division’s mission, as set forth in law, Joel Alter is to determine the degree to which state agencies Caitlin Badger and programs are accomplishing their goals and Valerie Bombach objectives and utilizing resources efficiently. Sarah Delacueva Will Harrison Topics for evaluations are approved by the Jody Hauer Legislative Audit Commission (LAC), which has David Kirchner equal representation from the House and Senate Laura Logsdon and the two major political parties. However, Carrie Meyerhoff evaluations by the office are independently Ryan Moltz researched by the Legislative Auditor’s professional Judy Randall staff, and reports are issued without prior review by Catherine Reed the commission or any other legislators. Findings, Jodi Munson Rodriguez conclusions, and recommendations do not Laura Schwartz necessarily reflect the views of the LAC or any of KJ Starr its members. Jo Vos OLA also has a Financial Audit Division that To obtain reports in electronic ASCII text, Braille, annually audits the financial statements of the State large print, or audio, call 651-296-4708. People with of Minnesota and, on a rotating schedule, audits hearing or speech disabilities may call through state agencies and various other entities. Financial Minnesota Relay by dialing 7-1-1 or 1-800-627-3529. audits of local units of government are the responsibility of the State Auditor, an elected office To offer comments about our work or suggest an established in the Minnesota Constitution. audit, investigation, or evaluation, call 651-296-4708 or e-mail [email protected]. OLA also conducts special reviews in response to allegations and other concerns brought to the attention of the Legislative Auditor. The Legislative Printed on Recycled Paper Auditor conducts a preliminary assessment in response to each request for a special review and decides what additional action will be taken by OLA. For more information about OLA and to access its reports, go to: www.auditor.leg.state.mn.us. OFFICE OF THE LEGISLATIVE AUDITOR O L A STATE OF MINNESOTA • James Nobles, Legislative Auditor April 2015 Members of the Legislative Audit Commission: The State of Minnesota has provided financial support to the Minnesota Film and TV Board since 1983. The board is a private, nonprofit organization that provides information and other assistance to people interested in making film and TV productions in the state. The board also administers the state’s film production jobs program, otherwise known as “Snowbate.” Our report assessed how well the board has administered its state operations grants and the film production jobs program. However, the Legislature’s objectives in funding the board and the program are unclear. As a result, it is difficult to hold the board accountable for the public money it receives from the state. We recommend the Legislature clarify its expectations for the operations grants and the film production jobs program. In addition, the board has created eligibility criteria for the film production jobs program that may be limiting the program’s job creation potential. The level and consistency of state funding are likely contributing factors, too. Our evaluation was conducted by Carrie Meyerhoff (evaluation manager) and Catherine Reed. The Minnesota Film and TV Board cooperated fully with our evaluation. Sincerely, James Nobles Legislative Auditor Room 140 Centennial Building, 658 Cedar Street, St. Paul, Minnesota 55155-1603 • Phone: 651-296-4708 • Fax: 651-296-4712 E-mail: [email protected] • Website: www.auditor.leg.state.mn.us • Minnesota Relay: 1-800-627-3529 or 7-1-1 Table of Contents Page SUMMARY ix INTRODUCTION 1 1. BACKGROUND 3 History 3 Structure 5 Activities 7 Funding 8 Other States’ Film Offices 11 2. STATE GRANTS 15 Grant Administration 15 Grantee Duties 19 Grant Reports 29 3. FILM PRODUCTION INCENTIVES 33 Purpose 33 State Comparisons 35 Evaluations of Film Incentive Programs 44 Minnesota Program Design Assessment 45 4. OTHER ISSUES AND RECOMMENDATIONS 53 Minnesota Film and TV Board Leadership 53 Film Production Jobs Program Focus and Funding 54 Recommendations 56 LIST OF RECOMMENDATIONS 61 APPENDIX A: Projects Approved for Film Production Jobs Rebates 63 APPENDIX B: State Film Production Incentives 67 BOARD RESPONSE 69 RECENT PROGRAM EVALUATIONS 75 List of Exhibits Page 1. BACKGROUND 1.1 Significant Dates in Minnesota’s Support of the Film Industry 4 1.2 Minnesota Film and TV Board’s Structure, Fiscal Year 2015 6 1.3 Appropriations for Minnesota Film and TV Board Operations Grants, Fiscal Years 1984-2015 8 1.4 Minnesota Film Production Jobs Program Funding, Fiscal Years 1997-2015 9 1.5 Minnesota Film and TV Board Revenue, Fiscal Year 2014 10 1.6 Minnesota Film and TV Board Expenditures, Fiscal Year 2014 11 1.7 Minnesota’s and Sample States’ Film Offices, Fiscal Year 2014 12 1.8 Advantages and Disadvantages of a Private Sector Film Commission 13 2. STATE GRANTS 2.1 State Grants to the Minnesota Film and TV Board, Fiscal Years 2010-2015 16 2.2 Board Initiatives, Core Services, and Goals, Fiscal Years 2010-2013 20 2.3 Film Production Jobs Program 22 2.4 Snowbate Eligibility Requirements, Fiscal Year 2015 23 2.5 Application Process, Film Production Jobs Program, Fiscal Year 2015 25 2.6 Expenses Eligible for Film Production Jobs Program Reimbursement, 2014 27 3. FILM PRODUCTION INCENTIVES 3.1 Film Incentive Structures 36 3.2 State Film Incentives by Structure, 2014 37 3.3 Advantages and Disadvantages of Rebate Film Incentives 37 3.4 Minnesota’s and Sample States’ Incentive Programs, Selected Details 39 3.5 Minnesota’s Film Production Jobs Program Design for 20 Percent Reimbursement, 2014 40 3.6 Minimum In-State Spending Requirements, Selected States, Fiscal Year 2015 41 3.7 Projects Approved for Minnesota Film Incentives, Job Data, Fiscal Year 2014 46 3.8 Minnesota Personnel Working on Projects Approved for Film Incentives, Fiscal Year 2014 47 3.9 Projects Approved for Rebates from the Film Production Jobs Program, July 2013 through December 9, 2014 49 3.10 Minnesota Spending by Recipients of Film Production Incentives, Fiscal Year 2014 50 viii MINNESOTA FILM AND TV BOARD Page APPENDICES A.1 Projects Approved for Reimbursement from the Minnesota Film Production Jobs Program, Fiscal Year 2014 64 A.2 Projects Approved for Reimbursement from the Minnesota Film Production Jobs Program, July 1, 2014, through December 9, 2014 65 B.1 States’ Film Production Incentives 68 Summary Key Facts and Findings: Most of the productions that the board approved for rebates between July 2013 and December 2014 were The Minnesota Film and TV Board television commercials, is a private, nonprofit corporation postproduction-only projects, or that receives state funds for its low-budget films. (p. 49) operatid t ons an o administer the film production jobs program. The The Minnesota Film Vand Board T Department of Employment and staff thoroughly review Economic Development (DEED) productions’ expenditures before oversees state funding to the board. forwarding them to DEED for (pp. 5, 8-9) reimbursement. (pp. 18, 27) The Legislature has not been clear The board has created eligibility about its expectations of the board criteria for the film production jobs The Legislature or the film production jobs program that may limit job creation, needs to clearly program, making state oversight and two criteria were not clearly challenging. (pp. 21-22, 58-59) articulate its permitted by law. (pp. 24, 48) expectations for the state’s film The 20 15 appropriation for the film production jobs program— Key Recommendations: production jobs $5 million—was similar to funding program, fund in a sample of states, although it In statutes or appropriation laws, the program was still below funding in most the Legislature should write clear accordingly, and states with film incentives. expectations ifor operat ons grants to hold the (pp. 38-39, 70) the Minnesota Film and TV Board Minnesota Film and for the state’s film production Thirty productions approved for jobs program. (pp. 57-59) and TV Board Minnesota incentives in fiscal year accountable for 2014 received almost $1.2 million The Legislature should fund the meeting the and spent over $5.5 million in the film production jobs program at a Legislature’s state. (pp. 46, 50) level consistent with its expectations. expectations, and the board should These productions provided work administer the program consistent for an estimated 496 Minnesotans, with those expectations. most of whom worked ten days or (pp. 58-59) less on assisted projects. (pp. 46-47) The Minnesota Film Vand Board T and DEED should develop grant When Legacy Arts and Cultural agreements that include clear board Heritage funds supported the film duties and measurable goals. production jobs program, the board (p. 57) stayed within its approved budget but exceeded the administrative The board should report completely expenses allowed by the law that and accurately on its activities and governs the program. (pp. 18-19) achievements related to state grant funds. (p. 60) x MINNESOTA FILM AND TV BOARD Report Summary similar to funding for a sample of other states’ programs, but was below The Minnesota Film and TV Board is funding in most other states with film a private, nonprofit corporation.
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